Standing Committee A

[Mr. Derek Conway in the Chair]

Local Government Bill

New Clause 10 - Registered social landlords

'(1) After section 41 of the Audit Commission Act 1998 (c.18) there is inserted— 
 ''41A Inspections of registered social landlords 
 (1) The Commission may carry out an inspection of— 
 (a) the quality of services provided by a registered social landlord; 
 (b) a registered social landlord's arrangements for securing continuous improvement in the efficiency, effectiveness and economy with which it provides services. 
 (2) Where the Commission has carried out an inspection under subsection (1) it shall issue a report. 
 (3) A report under subsection (2) shall mention any matter that, as a result of the inspection, the Commission considers should be drawn specifically to the attention of the Relevant Authority. 
 (4) The Commission— 
 (a) shall send a copy of a report under subsection (2) to the registered social landlord concerned and to the Relevant Authority; 
 (b) may publish a report under subsection (2) and any information in respect of a report. 
 (5) Section 11 of the Local Government Act 1999 (best value inspections under section 10: inspectors' powers and duties, and offences) shall apply for the purposes of an inspection of a registered social landlord under subsection (1) of this section as it applies for the purposes of an inspection of a best value authority under section 10 of that Act. 
 (6) The Commission shall, when drawing up any programme of inspections under subsection (1), consult the Relevant Authority. 
 41B Fees for inspections under section 41A 
 (1) The appropriate person may by order make provision of any of the following kinds in relation to the charging of fees by the Commission in respect of inspections under section 41A(1)— 
 (a) provision authorising the Commission to prescribe a scale or scales of fees in respect of inspections; 
 (b) provision governing the prescribing of scales; 
 (c) provision requiring a registered social landlord inspected under section 41A(1) to pay to the Commission any fee applicable to the inspection in accordance with a scale prescribed under provision of the kind mentioned in paragraph (a); 
 (d) such incidental, consequential or supplementary provision as the appropriate person thinks necessary or expedient. 
 (2) In subsection (1) ''the appropriate person'' means— 
 (a) in relation to registered social landlords for which the Housing Corporation is the Relevant Authority, the Secretary of State, and 
 (b) in relation to registered social landlords for which the National Assembly for Wales is the Relevant Authority, the Assembly. 
 (3) The Secretary of State shall, before making an order under subsection (1), consult— 
 (a) the Commission and the Housing Corporation, and 
 (b) persons appearing to the Secretary of State to represent registered social landlords affected by his proposals. 
 (4) The National Assembly for Wales shall, before making an order under subsection (1), consult—
 (a) the Commission, and 
 (b) persons appearing to the Assembly to represent registered social landlords affected by its proposals. 
 (5) The Commission shall, before prescribing a scale of fees that it is authorised to prescribe by an order under subsection (1) made by the Secretary of State, consult— 
 (a) the Secretary of State and the Housing Corporation, and 
 (b) persons appearing to the Commission to represent registered social landlords affected by its proposals. 
 (6) The Commission shall, before prescribing a scale of fees that it is authorised to prescribe by an order under subsection (1) made by the National Assembly for Wales, consult— 
 (a) the Assembly, and 
 (b) persons appearing to the Commission to represent registered social landlords affected by its proposals.'' 
 (2) In section 52(1) of that Act (orders and regulations to be made by statutory instrument), after ''the Secretary of State'' there is inserted ''or the National Assembly for Wales''. 
 (3) In paragraph 8(2) of Schedule 1 to that Act (categories of function in respect of which Commission must over time balance income and expenditure), after paragraph (c) there is inserted— 
 ''(ca) its functions under section 41A relating to such landlords;''. 
 (4) After paragraph 8 of that Schedule there is inserted— 
 ''8A Each of— 
 (a) the Secretary of State, and 
 (b) the National Assembly for Wales, 
 may make grants to the Commission in respect of expenditure incurred or to be incurred by the Commission in connection with the carryingout of its functions under section 41A.''.'.—[Mr. Raynsford.] 
 Brought up, and read the First time.

Nick Raynsford: I beg to move, That the clause be read a Second time.
 The Chairman: With this it will be convenient to discuss the following: 
 Amendment (a), 
at the end of section 41A(1)(b) insert— 
 '(c) a registered social landlord's arrangements for cooperating with local housing authorities and for responding to the differing needs of tenants and applicants for housing in different areas.'. 
Amendment (b), 
at the end of section 41A(4)(b) insert— 
 '(c) shall cause to be sent to each tenant of the registered social landlord a summary of the report; and 
 (d) shall make available for inspection a copy of the report at such offices of the registered social landlord and within such convenient travelling distances as it determines of the tenants of the registered social landlord.'. 
Amendment (c), 
in section 41A(6), after '(1)', insert— 
 '(a) ensure that the demands of such inspections are proportionate to the size of the registered social landlord; 
 (b) '. 
Amendment (d), 
after section 41A(6) insert— 
 '(7) The Commission, when undertaking an inspection under this section, shall— 
 (a) consult including by holding one or more public meetings of tenants and applicants for housing in each area served by the registered social landlord about its management, efficiency, value for money and quality of service delivery; and 
 (b) offer to employees of the registered social landlord the opportunity to make representations on their findings before they are finalised.'.
Amendment (e), 
in section 41B(3)(b), leave out 'the Secretary of State to represent' and insert 'be'. 
Amendment (f), 
in section 41B(5)(b), leave out 'the Commission to represent' and insert 'be'. 
Amendment (g), 
in section 41B(6)(b), leave out 'the Commission to represent' and insert 'be'. 
Government amendments Nos. 184 to 186.

Nick Raynsford: The amendments are the result of the Government's decision, announced last July, to establish a single inspectorate for housing in the Audit Commission. Before going into detail on the amendments, I should like to record my gratitude to the Housing Corporation and the Audit Commission. Since the announcement, they have forged a close and constructive relationship. That positive co-operation and understanding has made possible the achievement of our objective within a tight time scale.
 The Government are determined to improve continuously the quality of service that social housing tenants receive from their landlords. The housing inspectorate will have the opportunity to build on the excellent inspection work of the commission and the corporation. The corporation's regulatory code is designed to ensure that housing associations focus on the needs of their tenants and customers, and improve the service that they provide to them. The commission has applied a rigorous and impressive best value inspection regime to councils since April 2000. 
 The new arrangements involve some change for housing associations. The corporation will remain the statutory regulator and continue to provide leadership for the housing association sector. The commission will use its expertise to focus on service delivery throughout the social housing sector. The corporation and the inspectorate will work together closely to ensure that inspection and regulatory activity are properly co-ordinated to avoid unnecessary burdens on housing associations, and to minimise the impact of the changes on social landlords.

Edward Davey: The Department has given assurances in the past that the regime that is being put in place will not be a burden on the housing association sector and will not create competitive problems for it. Will the Minister ensure that the regime is monitored closely and kept under review, so that we do not end up with over-burdensome regulation?

Nick Raynsford: The thrust of the Government's policy on inspection is to ensure that it is proportionate. The hon. Gentleman will know that the comprehensive performance assessment process relating to inspection has been developed with the commission and the close involvement of the Government. That has been designed to ensure that we focus on those areas where there is concern or a need to improve, and that there is a light touch for those
 organisations that are clearly performing well. We want that broad approach to apply in relation to the housing inspectorate.
 The principle is that inspections must be proportionate and must help authorities or RSLs to improve their performance, not impose unnecessary burdens. As I have said, there should be a particularly light touch for high-performing bodies. We certainly endorse that principle, and I am confident that the commission will want to put it into effect. 
 The inspectorate will be required to report the results of its inspections of housing associations to the corporation and to consult it about its programme of inspection. Our aim is to ensure that tenants receive uniformly high service standards, not to impose double regulation on housing associations. Inspections will be sensitive to the needs and requirements of both sides of the social housing sector, and will take account of the differences in status, structure and approach of individual local authorities and housing associations. 
 Transitional arrangements for the new inspectorate will take effect from 1 April this year. They will be based on section 40 of the Audit Commission Act 1998, which enables the corporation and the commission to agree programmes of comparative value-for-money studies of registered social landlords. I am grateful to the Audit Commission and the Housing Corporation for the efforts that they have made and continue to make to ensure a smooth transition. Initially, the commission will carry on the corporation's work as a going concern using the same inspection methodology applied by the same staff. Changes to the methodology after the transfer to move to a common system will be needed over time, but will be made after fully consulting those affected. 
 For the longer term, we need a more comprehensive and permanent basis for operating and financing the new inspectorate. That is what the Government amendments will provide. In Wales, the position is slightly different. No decision has been taken that the Audit Commission should take over inspection of housing associations there. The National Assembly recently launched a consultation exercise on the regulation of registered social landlords and will decide what inspection arrangements are appropriate for the housing associations that it regulates. Our amendments will allow the provisions to apply in Wales as well as England if the Assembly so chooses. In describing the new powers, references to the corporation should be understood to apply to the Assembly if it chooses to adopt the powers. 
 The substance of the amendments is contained in new clause 10, which inserts two new sections in the Audit Commission Act 1998. The first gives the commission a new power to inspect registered social landlords, and makes provision about the issuing of reports, access of inspectors to premises and information, and consultation between the commission and the Housing Corporation on a programme of inspections. The second gives the Secretary of State the power, following consultation, to make an order authorising the commission to 
 charge fees for inspection. That does not imply that we intend to introduce fees now. However, there are good reasons for making provision in the Bill that would permit the charging of fees after due consultation. Local authorities pay charges for inspection to the Audit Commission, and it would be anomalous if there were no possibility of charges to housing associations under a single inspection regime. 
 Charges help to maintain the independence of the inspector, and give the body inspected a stake in the process. A charging regime would allow associations to request additional work if they wanted to do so. I understand the anxiety that the proposal may cause, but I have already given a clear assurance, which I am happy to repeat today, to the National Housing Federation that there will be full consultation before charging is introduced. The commission is not authorised to charge fees unless and until an order is made following consultation. If such an order is made, the commission will have to consult on its proposed scale or scales of fees.

Edward Davey: I am grateful to the Minister for repeating that assurance. However, I am led to believe that he also told the National Housing Federation that foreseeable future payments for inspections would be made through a transfer of resources between the Housing Corporation and the Audit Commission. Will the Minister confirm that?

Nick Raynsford: The Housing Corporation currently meets the cost of inspection. There will be a transfer of funds with the transfer of responsibility, so that the Audit Commission can maintain the programme in the transitional period, as I described. A transfer of the funds currently available to the Housing Corporation will ensure that the Audit Commission has the funding to do the work. The subsequent arrangements are entirely a matter for future consideration. We are simply making the provisions available so that a charging regime could be introduced if it was thought to be appropriate, following proper consultation. However, I have made it clear that there is no current intention to introduce such a regime. The transfer will not involve the imposition of charges from April this year.

Edward Davey: I am grateful to the Minister for confirming that. Is the provision really needed in case the Audit Commission would like to charge for consultancy services as opposed to fees and charges for inspection, or do the Government envisage that this measure could be used for charging fees for inspection?

Nick Raynsford: As I have made clear, under the current framework the Audit Commission charges local authorities for inspection. There would be a slightly curious position if, when we have a combined inspectorate that inspects both local authority housing departments and registered social landlords, the Audit Commission had the power to charge local authorities but not registered social landlords. As the hon. Gentleman rightly identified, a body that has been inspected may ask the inspectorate to do further work in a purely voluntary capacity to build on certain
 conclusions or findings from the inspection. A local authority can choose to do that and it pays a fee to the Audit Commission.
 Without that power, it would not be possible for the Audit Commission to charge a fee to a housing association for the kind of consultancy service that the hon. Gentleman identified. There is an obvious logic in making that power available. It would enable voluntary consultancy to be available immediately. If there were a longer-term change to the arrangements involving a standard scale of fees applicable to all bodies subject to inspection, it would be a matter for full and detailed consultation with all interested parties before there was any question of the appropriate order being made.

Andrew Turner: I am concerned that the Minister talks about voluntary consultancy services rather than additional inspection services. It is important to distinguish between the role of the inspector and that of the consultant. Otherwise, the inspector would be inspecting an authority more to see whether it had implemented his management suggestions than to see whether it had implemented an appropriate set of management arrangements. Can he confirm that he is talking more about extended inspection services than about consultancy?

Nick Raynsford: The hon. Gentleman should not read too much into the use of the term ''consultancy'' by the hon. Member for Kingston and Surbiton (Mr. Davey). I said that it would be logical in certain cases for a body that had been inspected to request some further work arising from that inspection. I then said that that would be a form of consultancy because it would be a voluntary rather than an obligatory process. It would be commissioned by the individual housing body. I use the term ''consultancy'' in that sense, but the hon. Gentleman is quite right to say that this should essentially be follow-up services after an inspection. We do not envisage the Audit Commission challenging KPMG or other consultancies, although that might attract one or two people in the future. At present there is no such intention.
 Subsection (2) of the new clause is needed to enable these arrangements to be applied separately to Wales if the National Assembly so chooses. Subsection (3) requires the Commission to balance over time income and expenditure on inspection of housing associations. Subsection (4) allows the payment of grant by the Secretary of State or the National Assembly to the Commission to cover the costs of such inspection. Amendments Nos. 184 to 186 are consequential amendments to the commencement provisions. I hope that that explains the purpose of the new clause and the amendments. Inspection is an important tool, which is already helping to drive up standards for tenants. Moving to a single inspectorate for all social landlords will improve the effectiveness of that tool and ensure consistency throughout the social housing sector.

Derek Conway: Before I call the next speaker, it might be for the convenience of the Committee if we debate the amendments to the new clause as part of the
 general debate on the new clause itself. Otherwise, there might be confusion between Government amendments and Opposition amendments. As they are all related anyway, it seems a neater way of dealing with the clause.

Geoffrey Clifton-Brown: Good morning, Mr. Conway. That is helpful advice. I will leave my hon. Friend the Member for Isle of Wight (Mr. Turner) to deal with his amendments. I want to concentrate on new clause 10. I suspect that the Government may be rushing into legislation without thinking the matter through properly at the edges. We need to probe a number of aspects of the new clause.
 The helpful brief from the National Housing Federation states that when the ODPM announced a single inspectorate, it was intended that the Audit Commission should absorb the inspection functions of the Housing Corporation and the Housing Corporation would retain its regulatory role. The Minister nods; that is most helpful. We must be clear about who does what and check that there is no overlap or double function. The brief also says that it is unclear what housing associations will be inspected on, apart from quality of services and continuous improvement. What is meant by ''continuous''? The only similar point of reference is the continuous improvement for which local authorities with a statutory duty strive. We need to know which regulatory body is doing what. 
 The matter is further complicated because the National Audit Office has a role. The Government are about to lay before the House two statutory instruments, which have been printed so prematurely that they do not even have numbers. The first is the Government Resources and Accounts Act 2000 (Examinations by Comptroller and Auditor General) Order 2003, and the second is the Government Resources and Accounts 2000 (Rights of Access of Comptroller and Auditor General) Order 2003. The explanatory note to the second order refers to other functions that the National Audit Office has in addition to those of the Audit Commission. Thus three different public bodies are involved in meddling with housing associations—the Housing Corporation, the Audit Commission and the National Audit Office. 
 The explanatory note to the first order states: 
 ''This order implements part of the Government's policy set out in its response, published on 13 March 2002, (Cm 5456), to Lord Sharman's report ''Audit and Accountability in Central Government.'' The order gives the Comptroller and Auditor General access, for the purpose of his financial audit of the account of government Departments and non-departmental public bodies, to documents held or controlled by the following''.

Edward Davey: The hon. Gentleman has made the bizarre point that he does not want the Comptroller and Auditor General to have powers of audit over bodies that spend public money. That is an extraordinary statement from the Conservative Front Bench. Does the hon. Gentleman want to withdraw his statement before he digs himself into an even deeper hole?

Geoffrey Clifton-Brown: That was a pretty fatuous intervention. The hon. Gentleman knows perfectly well the point that I was making. He deliberately misrepresents what I said. I am probing the Government on the functions that each of the public bodies undertakes because I want to find out whether they are duplicated, which would mean rolling up the costs of administration and bureaucracy. It is typical of the Liberals to try to misrepresent our position.

Desmond Swayne: Quisling.

Geoffrey Clifton-Brown: Exactly. Quisling, as my hon. Friend said.

Derek Conway: Order. We will not have words like that bandied around.

Desmond Swayne: On a point of order, Mr. Conway. I am in a difficult position, as I have called the hon. Gentleman a number of things. In withdrawing and apologising, may I ask for some similar offences to be taken into account?

Derek Conway: Indeed, as long as it is the last of the similar offences.

Geoffrey Clifton-Brown: Perhaps I, too, had better withdraw the word. The hon. Gentleman's intervention and misrepresentation caused considerable irritation. We need to know what each public body does.
 What exactly is a registered social landlord? Is it a private or a public body? Until 1988, housing associations were funded entirely by public funds. Since then, they have had £14 billion of private sector loans, combined with public grants, and that further clouds the issue. They have many of the characteristics of private bodies—they have directors, for example. If they are private bodies, is it right that a huge regulatory regime should be heaped upon them? 
 The Minister said that the new clause introduced a new power, but I question whether it is new. The new clause refers to the Audit Commission Act 1998, but section 41 of that Act contains the power that is proposed in the new clause when combined with sections 10 and 11 of the Local Government Act 1999. 
 Section 41 of the 1998 Act states: 
 ''The Commission may if authorised to do so . . . require a registered social landlord, or any officer or a member of a registered social landlord, to supply such information as the Commission may require.'' 
The Act also enables the Commission to require that information be supplied or documents be made available. 
 Section 10 of the Local Government Act 1999 states: 
 ''The Audit Commission may carry out an inspection of a best value authority's compliance with the requirements of this Part.'' 
Section 11 states: 
 ''An inspector has a right of access at all reasonable times . . . to any premises of the best value authority concerned.'' 
Section 11(6) mentions: 
 ''Any expenses incurred by the inspector.'' 
Those Acts give the inspector the power not only to inspect and to require documents to be produced but to charge. I am therefore not sure what is the purpose 
 of the new clause and the new power that Minister seeks to give himself. Perhaps it is just that clarification is needed. 
 I should like to move on to discussing the charging. Many parish councils have seen their auditing charges increase by several 100 per cent. a year as a result of the Audit Commission's activities. Only this week, I wrote to the Minister about the case of a parish council in my constituency in which the charge has gone up enormously. If the experience of parish councils is typical, we could expect individual housing associations to face hugely increased bills, if they start to be charged for the audit function. The Minister shakes his head, but the precedent is there and plain for all to see. People running housing associations will want reassurance from the Minister on the matter. 
 I understand that a proposal for a block transfer grant from the Housing Corporation to the Audit Commission is under discussion. However, presumably the Housing Corporation will seek to recover that money from the individual housing associations. The Minister shakes his head, so we learn something. 
 Will the Minister assure us that the auditing charges will never fall on the individual housing associations?

Nick Raynsford: No.

Geoffrey Clifton-Brown: The Minister is not saying that, so they will have to start paying for those auditing functions. He nods in one place and shakes his head in another. Perhaps we will get some clear answers when the Minister replies.

Nick Raynsford: Before the hon. Gentleman goes on confusing himself unnecessarily, I made it absolutely clear—I am sorry that the hon. Gentleman was not listening—that there will be a block grant transfer from the Housing Corporation to the Audit Commission in the short term. Because that is a transfer from one Government body to another there is no question of any impact on housing associations, as the hon. Gentleman inferred. I have already made it clear that, if there were to be any question of the introduction of a charging regime, full consultation would take place with all interested parties before that happened.
 Will the hon. Gentleman now stop scaremongering and listen to what the arrangements will do, before he continues with other misleading and wholly unjustified comments?

Geoffrey Clifton-Brown: I listened carefully to the Minister's words. He said that there was to be a block grant transfer. That is fine, providing that continues to happen. He then went on to say that if there were any changes, there would be consultation. He therefore must have changes in mind, because otherwise he would give us a categorical assurance that the individual housing associations would not be charged as a result of the introduction of the power.

Nick Raynsford: I am so sorry that the hon. Gentleman has once again not been listening. I had a lengthy exchange with the hon. Member for Kingston and Surbiton on that matter. The provision for the power is necessary, so that if housing associations wanted to commission additional work on top of the basic inspection from the Audit Commission, the Commission would be able to do that work and charge for it. That is why we are introducing the provision. If, in future, a different approach to charging were to be adopted, consultation would be appropriate.
 However, the good reason for the provision being included in the Bill is to enable the sensible arrangement that I discussed with the hon. Member for Kingston and Surbiton to apply. I am sorry that the hon. Gentleman was not listening.

Geoffrey Clifton-Brown: The Minister keeps saying that I was not listening. He may not want to hear my probing and criticisms, but that is a different issue. However, he must hear those criticisms, and I hope that I shall get some answers.
 As I understand it, there are already powers under the Local Government Act 1999 for inspectors of the Audit Commission to charge expenses. When I was a member of the Public Accounts Committee, if the National Audit Office wanted to provide a service over and above what it was statutorily obliged to provide, it could charge for it. In summing up, will the Minister say whether, if an individual housing association wished to commission a particular service from the Audit Commission, it could charge for it?

Nick Raynsford: No.

Geoffrey Clifton-Brown: He says that it cannot. I wonder whether that is right, because under the Local Government Act 1999 the National Audit Office can charge for additional services.

Nick Raynsford: The hon. Gentleman is once again confusing matters. The Audit Commission can charge local authorities. That is why the power is there under the Local Government Act 1999. It is precisely because we are bringing together in a combined inspectorate the inspection of both local authorities and registered social landlords to whom different provisions apply that the clause is necessary.

Geoffrey Clifton-Brown: Again, the Minister's comments are tangential. Any public body is entitled to employ consultants, including accountants, to give it advice on any of its statutory services. At present, housing associations with a problem can go to any accountant in the country, including the Audit Commission, for consultancy advice. The Minister is creating a smokescreen by introducing this charging regime to allow housing associations to do something they can already do.
 The Housing Corporation will have to absorb the block grant. Will the Minister say what the block grant will be? In giving the new power he must have worked out what it is to be. It is coming off the bottom line of the Housing Corporation's budget. I presume that the Housing Corporation will at some point seek to 
 recover it from housing associations, otherwise there will be less grant for every housing association in the country.

Nick Raynsford: I am sorry that the hon. Gentleman is getting even more confused and is confusing himself by his own verbiage. The function of inspection is being transferred from the Housing Corporation to the Audit Commission. There will be a transfer of funding associated with the transfer of function. There will not be any residual costs to be recovered from housing associations, as the hon. Gentleman suggests. Does he understand that where there is a transfer of functions there should be an associated transfer of costs?

Geoffrey Clifton-Brown: The Minister would be right if it was entirely a matter of like for like, but precedent shows in parish councils that once the Audit Commission is involved—[Interruption.] The Minister laughs and shakes his head, but the facts are there. In many cases in parish councils the audit costs have gone up by several hundred per cent since the Audit Commission's involvement. If he does not believe that, I will write to him again with the facts of the parish council in my constituency and place them on the record by asking him a parliamentary question.
 I would like an assurance from the Minister that the Audit Commission will seek to recover the block grant at only the exact current cost of the function to the Housing Corporation and that in no way will the finances of the Housing Corporation be worse off as a result of the new clause. 
 Moving on, Mr. Conway, the new clause gives rise to another conflict of the functions of different bodies relating to guidance issued by the Housing Corporation under section 36(7) of the Housing Act 1996 and by the Secretary of State in relation to best value authorities under section 26(1) to (3) of the Local Government Act 1998. Is this double regulation? What guidance will the Minister give under new clause 10 that he does not already give? 
 Our exchanges this morning have been interesting. [Laughter.] Labour Members may laugh. They do not like the Opposition probing the Minister's intentions vigorously. The housing associations listening to these debates and watching what happens will be interested to hear what the Minister has to say. I look forward to some answers.

David Curry: I wonder whether a more interesting line of inquiry would be about the future of the Housing Corporation. The corporation traditionally has two functions: grant distribution and inspection. It was subject to a recent fundamental review that put arguments that made one wonder whether a nationally based Housing Corporation was necessary. If it loses its inspection function and the housing strategies are further regionalised, perhaps to the regional development agencies or regional authorities—the Minister accused me of saying that such authorities would have no functions, but I accept that the only substantive
 function would be this puny one—one starts to reflect whether there is role for the Housing Corporation. One wonders whether its functions would not be more effectively administered in a different way and at a different tier.
 On top of that, we must consider the Deputy Prime Minister's statement on additional house building, in which he talked in imprecise terms about new delivery mechanisms, including a development corporation for the Thames gateway and Thurrock area. The Government may be moving towards bringing together funding and planning delivery vehicles to achieve housing development. The Select Committee on Housing, Planning, Local Government and the Regions has examined the matter and seen many possible disadvantages, while the waste that the additional houses will produce and that will have to be disposed of has been considered elsewhere. 
 Putting those thoughts together, are the Government wondering whether, in the medium term, the Housing Corporation, which was set up to do a specific task in specific circumstances, is still fulfilling a worthwhile function or whether different mechanisms should be adopted? If so, we may look back at this time as when we began to see the track appearing through the fog. Will the Minister speculate gently on that, given that he was just about the only Minister who came out with any honour from Sir Andrew Foster's retrospective on interference with the Audit Commission?

Andrew Turner: I rise to support the comments made by my hon. Friend the Member for Cotswold (Mr. Clifton-Brown). He explored in some detail the question of charging by the Audit Commission for inspections, and I will not go down that road again because he drew out some interesting responses from the Minister. I am concerned that once we give a public body the power to charge, its charges are inclined to rise somewhat more quickly than the rate of inflation. I am sure that that matter will be consulted on in due course, but it is worth putting on the record that far too many public bodies charge those who are forced to be their customers too much. The Audit Commission has a poor record on that.
 The Minister has been generous to my local authority recently, and he will be sorry to hear that it decided yesterday to set a rate increase of 14.5 per cent. It had been talking about an increase of 18 per cent. before the Minister's generosity became known, but 14.5 per cent. is still indicative of the fact that local authorities and other public bodies will allow charges to escalate too much unless they feel immediately threatened by the retribution of their electors or customers. I am sure that the fact that local elections in my constituency are some time away has taken the heat off the people who set the charges. 
 I support the points made by my hon. Friend the Member for Cotswold about the danger of handing the power to charge untrammelled to the Audit Commission. I accept that the Minister does not intend to do that today or tomorrow, but the Secretary of State is being given the power to do so in the future, and I fear that that power may be abused, because of 
 market failure. If there is only one inspectorate, the customer has no choice of inspection service. There can be a range of inspectors, as in the Ofsted process, which is effective. However, the Minister has chosen to impose a single inspectorate, which is what the new clause does, so there will be no competition in the delivery of inspection services of the sort that would drive down, and has driven down, charges and raised efficiency under the Ofsted inspection process.

Geoffrey Clifton-Brown: My hon. Friend is on to a good point, but there is some benefit and consistency in having one auditing body for all the Housing Corporation's functions. On the other hand, should not the Audit Commission, as the sole auditor, seek to minimise its charges rather than to charge a maximum rate, and should not those charges be in line with what the private sector would charge?

Andrew Turner: The commission should certainly seek to minimise its charges, and I hope that such a requirement will be included in any order that may follow consultation. However, it is not necessary to have a single inspector to operate a single inspectoral framework. Ofsted has demonstrated very well how a range of inspectors can operate a single inspectoral framework. The Minister has chosen not to go down that road. He may have good reasons, but I would like to hear what they are. It may be because there are relatively few housing associations compared with the number of schools, but I would like to know his reasons for choosing a monopoly.

Lawrie Quinn: I listened carefully to the hon. Gentleman, who obviously has great experience of the private sector. Will he say what proportion of a private company's turnover he would expect to be used for auditing and accountancy and how, in his experience, that would compare with the public sector?

Andrew Turner: I cannot answer that question. I may have given the appearance of having considerable experience of the private sector, but most of my experience is of working in the public sector. Before I got this job, I worked for a London local authority.

Lawrie Quinn: Which one?

Andrew Turner: The London borough of Southwark. The public sector is not necessarily a glowing example of efficiency, but I am sorry if I have misled the hon. Gentleman in any way about my past experience.
 Since Ofsted's introduction, the competition between its inspectors has driven down costs and enabled it to raise the quality of available inspection, but the Minister has chosen not to go down that road, presumably for good reasons. 
 I am sure that we all agree that an inspection process is justified, but the Opposition are always concerned about the proliferation of public bodies and ever greater intrusion into the operation of the market. The problem with social housing, as with schools, is that there is no effective market for providing it for two 
 reasons. The first is that tenants cannot easily move from house to house if they believe that their landlord is not effective. We must recognise that. I see that the Minister is nodding; he has recognised that. The second is that there is a monopoly provision of social housing in some areas. That has worsened in recent years as small-scale registered social landlords have amalgamated into larger ones.

Nick Raynsford: I agree with many of the hon. Gentleman's recent remarks about the lack of an effective market, for the reasons that he outlined, including the fact that tenants do not have the freedom to move. However, I was surprised at his comment that there has been a tendency in recent years towards a monopoly provision in certain areas. In general, social housing provision has become more diverse. The number of registered social landlords has increased the social housing sector, which was dominated largely by local authorities until some 20 years ago. I accept that that is not the case in every area, but it has been the general trend.

Andrew Turner: It depends what one means by recent. Certainly, we have seen diversification of social housing provision during the past 20 years, but more recently, particularly since 1997, there have been amalgamations of smaller registered social landlords. Two in my own constituency, Medina and South Wight housing associations, have had to amalgamate with mainland housing associations because, they claim, of rent controls imposed by the Minister, which prevent them from generating sufficient income to invest in property development. Other larger mainland housing associations, in contrast, make profits elsewhere that they can invest on the island.

Nick Raynsford: The history of the two housing associations provides a wider and more extensive background to the mergers. It is not simply a consequence of rent policy. However, I pass over that and suggest that though mergers affecting registered social landlords are occurring for efficiency purposes, a trend is discernible towards greater diversity with more large registered social landlords operating in many parts of the country than ever before in the past.

Andrew Turner: I am certainly pleased to hear that, as I was about to move on to the relatively small number of social landlords.

Geoffrey Clifton-Brown: Before my hon. Friend moves off, I recently had a similar discussion with the Fosse Way housing association. The Housing Corporation is exerting pressure on smaller associations to merge into bigger ones. That might produce greater efficiency, but sometimes tenants feel that their landlord becomes more remote as well geographically removed and that services decline as a result of the merger.

Andrew Turner: That is certainly the feeling among tenants. The jury is out on whether that will be the consequence of the amalgamations in my constituency. I see the Minister nodding in support of my hon. Friend's point. It is certainly a danger:
 whether the perception turns into a reality or larger landlords can devise effective consultation methods with tenants remains to be seen.
 I tabled amendments (a) to (g) principally to ensure that the inspection process is as sensitive and light-touched as the Minister proposes. Amendment (a) requires the Audit Commission in undertaking inspections to recognise the differences between different landlords in different areas and includes an obligation to take account of the needs of applicants for housing as well as those fortunate enough to have succeeded in their applications. Notwithstanding the provision of a single housing list, the treatment by different landlords of applicants varies considerably. To some landlords, applicants are seen as a thundering nuisance who get in the way of effective delivery of services to tenants. To others, they are viewed as prospective customers whose interest needs to be nurtured, and such landlords try to provide housing as close as possible to where it is needed rather than feeling that they have fulfilled their obligation by providing a house somewhere. If housing is available in a rural area, it is important that it should be offered to applicants in the village where they live rather than moving them to a town. The amendment would require the Audit Commission to respond to the differing needs of urban and rural areas and of tenants and applicants. 
 Amendment (b) would require that a report on the outcome of the inspection be made available to tenants and other interested parties at the office of the registered social landlord within a reasonable travelling distance for the tenants. Libraries, schools, village halls, and offices of town and parish councils would be appropriate places for the reports to be made available.

Geoffrey Clifton-Brown: And the internet.

Andrew Turner: My hon. Friend suggests the internet, to which a number of people now have access. However, the suggestion at a public meeting last Monday that a report by my local health authority was available on the internet drew catcalls from those in the audience for whom it was not available. The internet is not yet universally available. The sooner it is, the better—in some respects.
 Proposed new paragraph (c) in amendment (b) says that a summary of the report should be sent to every tenant. That is tremendously important. It replicates a provision in the schools inspection arrangements whereby a summary of the report is made available to every parent, and the full report is made available in the school. 
 Amendment (c) requires the inspection process to be proportionate to the size of the registered social landlord. I welcome the Minister's remarks that the thrust of the policy is to ensure that the inspection process is proportionate and that there is a light touch for organisations that are performing well. However, the word ''proportionate'' also means that sometimes a standard will be different in different areas. The 
 Minister talked about delivering ''uniformly high service standards''. Some people in rural areas accept that, because they live in rural areas, a different service standard is appropriate from that which is available in urban areas. The hon. Member for Scarborough and Whitby (Lawrie Quinn) shakes his head.

Lawrie Quinn: Until now, I thought that there was a great affinity between the hon. Gentleman's constituency of Isle of Wight, and Scarborough and Whitby. However, his last point about rural dwellers somehow being prepared to accept a lower standard or lower quality is a bogus argument in my experience of rural constituents. The Labour Government have done their utmost to move forward to a level playing field approach to ensure that there is no distinction between urban dwellers and rural dwellers. I hope that the hon. Gentleman will re-read the rural White Paper to see the difference between the Labour party's policies for rural dwellers and those of the Conservative party.

Andrew Turner: I will indeed do that, but I used the word ''different'', not ''lower''. I will, if I may, refer to an example from outside housing—I am sure that you will allow me a brief excursion in that direction, Mr. Conway. It is clear that larger hospitals are regarded as more efficient, and that a number of consultants are needed in a hospital to provide the highest possible quality of service. However, if one lives on an island, it is not good enough to be told that the only way to receive such a service is to go to the mainland.

Phil Sawford: We all live on an island.

Andrew Turner: I mean a small island. I am sure that the hon. Gentleman will forgive me if I have inadvertently lapsed into using the European definition of island, rather than the ''Oxford English Dictionary'' definition. The fact is that smaller populations recognise that sometimes they have a different level of service, and it is a level of service that is appropriate and acceptable to them. If I live in a village, I know that I will have to travel for some minutes before I get to a supermarket.

Kali Mountford: With the example of hospitals, I feel more confused than ever. The argument that consultants need to see a certain number of patients to keep skills might be a good argument for a bigger hospital, but it gives me no understanding of the differing housing needs in rural areas. My constituency is largely rural, and my constituents expect housing to be of a high standard and appropriate to their needs—some for single people, some for small families and some for larger families. Will the hon. Gentleman explain further what he means?

Andrew Turner: I can very easily. The distance that one has to travel to pay one's rent may be considerably longer in a rural area, particularly if it has no post offices, than in a town. A garage or place to park a car may be much more important to tenants in rural areas
 than in urban areas. It may be a trade-off, but a high-rise block of flats may be more acceptable to a tenant in an urban area where many tenants live in such places than in a rural area.

Geoffrey Clifton-Brown: Does my hon. Friend accept that one of the key differences is that where there are many RSL houses in one spot it is easier to have stronger housing associations and proper tenant participation in the management of their houses? In large diverse rural areas, that is far more difficult.

Andrew Turner: My hon. Friend gives a good example. If I were to give another, it is that in an urban area one might expect a tenant's hall to be provided as part of a social housing estate, as it is in many areas. In rural areas it is more likely to be a community hall, which is the village hall in the area and in which the registered social landlord does not have an interest. Those are the kind of differences to which I refer.
 I will not detain the Committee, but we have given examples of the sort of debate that could take place. 
 Amendment (d) also requires the closer involvement in the inspection process of the tenants in particular but also of applicants for housing. That is akin to another means sometimes highly used in the Ofsted inspection process: people should be given the opportunity to make representations through at least one public meeting. 
 Many people find it difficult to make representations in writing or over the internet, but a public meeting is a widely recognised and well-used means of making one's voice heard. It gives people the opportunity to support each other on an issue. Two or three people making their voices known in the same way will have a greater impact than one or two people writing separate—and perhaps rather ill-phrased—letters that the recipient might discount. Seeing someone with an objection face to face is different from reading a letter. I am sure that hon. Members have had that experience in their surgeries; I certainly have. I think that most of us find it necessary to be available to see people face to face. 
 The inspectors should be available to hear what tenants and applicants for housing feel about the registered social landlord. When they have prepared a draft report, it should be made available to employees, particularly the chief executive, so that they can comment on its contents.

David Lepper: I wonder whether the hon. Gentleman has conferred with the hon. Member for Cotswold on the points that he makes. It seemed that his hon. Friend was arguing for reducing management costs in implementing these proposals, whereas the hon. Gentleman seems to be adding layer on layer of procedures that would increase management costs.

Andrew Turner: My hon. Friend certainly argued for lower charges for the procedure. I think he would also argue, as do I, for a higher quality of service. The way one meets that is by achieving greater efficiency
 through the introduction of the market to inspections. [Laughter.] The hon. Gentleman laughs, but in the school inspection process we have a walking, talking example of how we can drive up the quality of inspections while driving down the cost.
 Amendments (e), (f) and (g) are simple. They require the commission to consult with registered social landlords and not with people whom it thinks may represent registered social landlords. I do not apologise for drawing on my experience in the education sector; it is one thing to consult bodies appearing to represent others and another to consult the bodies on which one's actions will have an effect. 
 There is no obligation for every registered social landlord to read the consultation document, to respond to it, or even to open the envelope in which it arrived. Direct consultation is far more effective and generates a much better response than indirect consultation. Indirect consultation may smooth out some of the bumps and glitches in the responses, but that is exactly why it is less effective. 
 I am happy to support the amendments.

Derek Conway: Before I call the next speaker, if the hon. Member for Isle of Wight wants to press any of his amendments to a Division, I ask him to advise the Clerk during the debate.

Edward Davey: I have one or two questions for the Minister and I shall be brief. Can he say what has to be inspected under section 41A(1)(a) and (b) and why the proposal is expressed in those terms? There is no problem with paragraph (1)(a), which refers to the quality of services provided by a registered social landlord. One would expect that to be the focus of the inspection. However paragraph (1)(b) refers to ''securing continuous improvement''. That may be welcome, but it is usually a statutory duty on a local authority. Registered social landlords are not public bodies, so I am interested in why the Government are placing a statutory duty usually associated with the public sector on a non-public body.
 Why have the Government made a specific reference in terms of the inspection requirements to the guidelines set out by the Housing Corporation? The Housing Corporation, in undertaking its inspection role, has very clear guidance, which is not about to be ripped up. Will the Audit Commission's inspections be based on the same guidance or will a new set of guidance be issued? The Minister said that there would not be double regulation in theory, but that is what we may get in effect. The matter must be clarified as the housing association sector and registered social landlords need to know the guidelines to which they are working before the inspectors arrive. 
 Why did the Minister decide to use section 11 of the Local Government Act 1999 as the basis for the new framework for registered social landlords? Why not use the Housing Act 1996—the primary legislation that governs registered social landlords? The Minister's decision seems odd, but I am sure that he will explain it to the Committee.

Nick Raynsford: We have had a wide-ranging debate and several useful points have been made. I shall try to respond to the issues that have been highlighted.
 The hon. Member for Cotswold asked about the division of responsibility between the Housing Corporation and the Audit Commission. The Housing Corporation will continue to be the regulator of registered social landlords, as it is statutorily obliged to be. It will also continue to have a number of other functions, which I shall refer to in responding to the questions asked by the right hon. Member for Skipton and Ripon (Mr. Curry). The commission's role will relate to inspection. It will look at the performance of registered social landlords and, for reasons that I shall set out when I respond to the hon. Member for Kingston and Surbiton (Mr. Davey), seek continuous improvement in their performance. 
 The hon. Member for Cotswold asked about the role of the National Audit Office. The new arrangements for the NAO arise from the recommendations of the Sharman report, which gives the NAO the role of external auditor to all non-Departmental public bodies, including the Housing Corporation. To enable it to carry out that function, the NAO is allowed access to RSL data to the extent that it is part of the financial audit of the Housing Corporation itself. The NAO is not taking over the inspection regime: it is simply being allowed access to information that is pursuant to and arises from its primary role as the external auditor of the Housing Corporation. I hope that that explains why there is not a model of three separate organisations. There is a perfectly proper role for the NAO in its overall scrutiny of public finances—the point rightly highlighted by the hon. Member for Kingston and Surbiton. 
 The inspection function will clearly be with the Audit Commission and the Housing Corporation will continue to be the regulator of registered social landlords.

Geoffrey Clifton-Brown: While the Minister was choosing his words very carefully and there may be a hair's breadth between the functions of the NAO and the Audit Commission, there will nevertheless be two different auditing bodies asking the Housing Corporation similar questions. That will result in duplication of effort, if not costs. Would it not be better for one of those two bodies to do both functions?

Nick Raynsford: No. It is perfectly proper for the NAO to keep the overview of all non-Departmental public bodies. It would be a curious framework if it were prevented from doing that. That is in the interests of overall scrutiny of public finance.

Edward Davey: The Minister may be interested to know that the right hon. Member for Haltemprice and Howden (David Davis) fully supports Lord Sharman's conclusions and recommendations.

Nick Raynsford: Of course he does. He looked at the matter in some detail and clearly wants to ensure that we have a proper framework for oversight of public
 finances. The NAO should rightly have that function. That does not in any way involve a confusion of the specific roles that I have outlined. The Audit Commission will perform an inspection role in relation to registered social landlords and the Housing Corporation will continue to perform its regulatory function.

Geoffrey Clifton-Brown: Yet again the hon. Member for Kingston and Surbiton has misrepresented what I was trying to say. My right hon. Friend the Member for Haltemprice and Howden was Chairman of the Public Accounts Committee when I was on it. We both support the Sharman recommendations. One recommendation was that the NAO should also audit the discharge of the Housing Corporation's functions to registered social landlords. In other words, there should be just one auditing body auditing all the functions of the Housing Corporation.

Nick Raynsford: That would be a fundamental change and would seriously affect the role of registered social landlords, which are not public bodies. The hon. Gentleman asked whether they were public or private bodies. I was going to answer that. It would be a major departure to give the NAO a responsibility for auditing bodies that are not public bodies. I hope that the hon. Gentleman will recognise that that is not necessarily the right way forward.
 The hon. Gentleman was wrong to say that until 1988 registered social landlords were funded purely from public funds. They were not. They are voluntary bodies. Some were set up in the 19th century. Many were in existence before 1974 when for the first time they became eligible for public money. They were mostly established as charitable or similar bodies such as friendly societies. They were non-profit making bodies and since 1974 they have been eligible for public funding, which was provided primarily via the Housing Corporation. That is their legal position. They remain essentially independent bodies. They might be deemed to be private by some people. I would describe them as independent because they are not for profit. Private often carries a connotation of profit-making, which they are not. They are certainly not public bodies.

Geoffrey Clifton-Brown: The Minister raises an important point. Does the power apply to all types of bodies such as almshouses, housing co-operatives, housing companies and not-for-profit companies? Is there any distinction or does the new clause cover all the bodies that are funded by the public sector? If bodies are not funded by the public sector—for example private co-operatives—will they still be covered?

Nick Raynsford: The hon. Gentleman asks an interesting question, because a diverse range of housing associations exists. Some are in effect non-operative, having ceased to develop and having only small property holdings that were developed many years ago. They are not doing any active work or
 receiving any public money. It would be odd for a huge inspection to apply to all 2,000-plus registered social landlords when some of them are not active.
 The focus will be on organisations that are operating as registered social landlords, and the Audit Commission will simply carry forward the inspection function that the Housing Corporation had put in place. As the hon. Member for Isle of Wight said, our intention is to ensure a proportionate regime. I will come on to the issue of proportion in a moment, because there are questions about small operations that can be risky. However, in general, the inspection regime is designed to focus on active housing associations that are in receipt of public money rather than those that are dormant. 
 The hon. Member for Cotswold asked about the audit fees charged by the Audit Commission and raised fears about parish councils. Although they are separate from the issues that we are discussing, it is right for me to remind him that the Audit Commission has introduced a new policy on the audit of parish councils, which specifically safeguards the position of the smallest parish councils by setting small maximum audit fees for small councils. Larger parish councils may require a more detailed audit because they are disposing of significant amounts of money, and we have covered that situation by introducing the provision, which we debated earlier, for grants of £30,000 for best value parishes. That will enable them to meet the best value obligations, including the more rigorous audit. 
 There may be individual cases in which parish councils have had increased audit fees, but many others have had substantial reductions as a result of the Audit Commission's policy, which is simply to cover its costs. There is no question of the commission trying to make a profit; it has simply to cover its costs and meet the obligations of efficiency savings of at least 2 per cent. per annum, which we rightly impose on it as well as local authorities. I have covered the issue of the budget transfer, but in case the hon. Gentleman is not satisfied, I should make it clear that there will be a transfer of £1.8 million from the Housing Corporation to the Audit Commission to cover 2003-04. 
 The right hon. Member for Skipton and Ripon raised some interesting questions. He will know that the future and role of the Housing Corporation has been debated as long as the corporation has been in existence, because its role has an interesting dualism. It is both the regulator of registered social landlords and the moneybags—the funder. That can provide a certain tension, and I have heard many debates over many years about whether it is right for a single body to fulfil both functions. In practice, it is right, as it makes sense for the body that is responsible for regulation also to ensure that public funds are channelled to the registered social landlords that are capable of using them to best effect. We do not see a problem or tension in the Housing Corporation continuing to perform those functions. 
 We also envisage the Housing Corporation having a considerable role in the communities plan, which my right hon. Friend the Deputy Prime Minister 
 announced over a week ago. The right hon. Member for Skipton and Ripon is right to say that the Housing Corporation will be involved in the delivery of that plan and that are there interesting questions about its relationship with other delivery vehicles. However, it would not be right to speculate further other than to say, as someone who worked closely with the Housing Corporation as Minister for Housing and Planning—as did the right hon. Gentleman—that I have great confidence in it and I hope that the right hon. Gentleman shares my confidence. I firmly believe that the Housing Corporation has an important future in providing the necessary comfort to lenders by maintaining a robust regulatory regime and in ensuring the effective delivery of the Government's communities plan. 
 I thank the right hon. Gentleman for his reference to Sir Andrew Foster's recent observations, which made it clear that this Minister was adamant in defending the independence of the Audit Commission.

Edward Davey: But not others.

Nick Raynsford: I recall references to the role of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), but I shall not comment further because it is irrelevant to our proceedings.
 The hon. Member for Isle of Wight referred to the absence of competition for inspection, though he accepted the need for consistency. Consistency is indeed crucial, and we should expect a standard level of inspection for bodies delivering social housing, whether they be registered social landlords or local authorities. 
 Amendment (a) is aimed at ensuring that an inspection will cover arrangements for co-operation between local housing authorities and registered social landlords and for responding to the differing needs of tenants and applicants for housing in different areas. We intend inspection to assess services to tenants in the widest sense and to examine the extent to which they are tailored to customers or potential customers. Relationships between registered social landlords and local housing authorities are important, but the Housing Corporation will maintain an interest in the light of its continuing investment and regulatory functions in respect of resources and strategies, and policies relating to local area needs. Comprehensive performance assessment of local authorities also examines the relationships between authorities and their partners. The amendment is therefore unnecessary. 
 Amendment (b) is designed to amend the requirements on publication of reports to require summaries for each tenant and full copies to be made available at convenient offices. Tenants will be involved in the inspection process and will naturally have an interest in the findings and follow-up action. Both the Audit Commission and the Housing Corporation publicise inspection findings widely, making them available on the internet and providing free copies on request. It is up to the local authority or registered social landlord to arrange any further publicity to tenants and residents.
 Registered social landlords are required to communicate the executive summary of inspection reports in ways appropriate to the communities that they serve. Given that reports will be readily available, it is right to leave it to individual landlords to communicate with their tenants in the most appropriate way. As my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper) pointed out, the requirements in the amendment would impose an excessive burden on registered social landlords. 
 Amendment (c) would make the demands of inspection proportionate to the size of registered social landlords. That level of detail is unnecessary to the Bill. The Housing Corporation's existing programme is already proportionate to size and levels of activity, as I made clear to the hon. Member for Cotswold, and we anticipate that the Audit Commission will adopt a similar approach. The key requirement is that the level of inspection be proportionate to risk. Size is one factor that determines risk, but not the only one. As Minister for Housing and Planning, I was involved with some significant cases where relatively small registered social landlords got into serious financial difficulty. It is incorrect to view the inspection as proportionate only to size, so the amendment is inappropriate. 
 Amendment (d) would place potentially onerous requirements on the Commission to hold meetings with tenants and to consult employees on findings as part of the inspection process. Again, it is unnecessary and unduly burdensome. 
 Finally, amendments (e), (f) and (g) are about consulting registered social landlords individually rather than their representative organisations. It is our practice to consult all registered social landlords as well as organisations representing them on key policy issues. I have already given an undertaking that there will be full consultation on the issue of fees. The new clause requires the Secretary of State to consult persons representing registered social landlords, and I am happy to reflect on whether it would be appropriate in practice to consult all registered social landlords before making an order authorising the charging of fees. There is nothing in the new clause to prevent our doing so. 
 I do not, however, think that it would be appropriate for the Audit Commission to be required to consult registered social landlords individually on fee scales. The requirement in relation to local authorities is for consultation with associations representing local authorities. Having responded to those points, I urge the hon. Gentleman to withdraw his amendments. 
 The hon. Member for Kingston and Surbiton asked why there was a requirement for continuous improvement. It is a matter of consistency of approach towards local authority housing departments and registered social landlords. Local authorities are already subject to a continuous improvement obligation and so, as the hon. Gentleman recognised, it would be odd not to expect a similar approach from 
 registered social landlords, which, in many cases, are providing more housing than individual local authorities. Some registered social landlords are very large, and it is right that they should be subject to the same expectation of continuous efficiency gains and improvement as local authorities. 
 The hon. Gentleman asked whether the Housing Corporation guidance would apply. The answer to that question is yes. There will initially be a straight transfer of the existing approach from the Housing Corporation to the Audit Commission, but as the integration progresses there may be—we would expect there to be—changes in guidance. Initially, however, the Audit Commission will work specifically on the Housing Corporation plans and guidance.

Edward Davey: Will there be one set of guidance? Presumably two sets will not be allowed to run in parallel at any one time?

Nick Raynsford: We certainly do not want the confusion of two separate guidance arrangements. The Audit Commission will work initially according to the Housing Corporation guidance. However, as the integration progresses, inevitably there will be some consideration of the need for new combined guidance. We do not want to see a framework in which there is a confusion of separate forms of guidance in operation. I shall write to the hon. Gentleman to set out specifically why we are using section 11 of the Local Government Act 1999 as the basis rather than the Housing Act 1996, and I hope that he will accept that explanation.
 I urge the Committee to support the new clause and the Government amendments, and I urge the hon. Member for Isle of Wight not to press his amendments.

Andrew Turner: I am not wholly satisfied with the Minister's explanations on amendments (b) and (d), but I am sure that this will not be the last piece of housing legislation this millennium, and that if we find that this does not work, we will have the opportunity to press such amendments in the future.
 Question put and agreed to. 
 Clause read a Second time, and added to the Bill.

New Clause 1 - Repeal of prohibition on promotion of homosexuality

'Section 2A of the Local Government Act 1986 (c.10) (local authorities prohibited from promoting homosexuality) ceases to have effect'.—[Mr. Davey.] 
 Brought up, and read the First time.

Edward Davey: I beg to move, That the clause be read a Second time.
 The Chairman: With this it will be convenient to discuss the following: 
 New clause 18—Repeal of section 2A of Local Government Act 1986— 
 '(1) The Secretary of State may by order made by statutory instrument provide that section 2A of the Local Government Act 1986 (c.10) shall cease to have effect.
 (2) No order under this section shall be made unless the Secretary of State has certified that— 
 (a) appropriate guidance has been issued under section 403(1A) of the Education Act 1996 (c.56); and 
 (b) an appropriate mechanism has been established for consulting parents of registered pupils by ballot about the contents of any written statement made in pursuance of section 404(1)(a) of that Act. 
 (3) No order shall be made under this section unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.'. 
Amendment No. 10, in 
 schedule 7, page 105, line 38, at end insert— 
 'Local Government Act 1986 (c.10) section 2A'.
 Government amendments Nos. 135 and 137 to 139. 
 Amendment No. 8, in 
 clause 122, page 69, line 9, leave out 'and 114' and insert 
 ', 114 and (Repeal of prohibition on promotion of homosexuality)'.
 Government amendment No. 140. 
 Amendment No. 9, in 
 clause 122, page 69, line 12, at end insert— 
 '( ) section 2A of the Local Government Act 1986 (c.10)'.
 Government amendments Nos. 141 and 142.

Edward Davey: In beginning the debate, I stress that new clause 1 and the related amendments have been tabled in a spirit of cross-party unity on the issue. I should like to pay tribute to the hon. Member for Colne Valley (Kali Mountford) and the hon. Member for Buckingham (Mr. Bercow) who, although he is not on the Committee, is in the Room today. I am also glad to say that the right hon. Member for Skipton and Ripon has attached his name to the new clause, along with other Conservative Members.
 It is not just in the House of Commons that there is cross-party unity on the issue. At the recent meeting of the executive of the Local Government Association, representatives of all parties were determined that they should campaign to remove this legislation from the statute book. It is against that background of different people of different parties having moved significantly on the issue that we are debating the new clause. 
 In my remarks I will look forward, as I hope other hon. Members will also do, rather than looking back at the history of which party did what at what time, because that is irrelevant. I will look at how we can move forward on the issue. It is important to remember the number of changes that have taken place in legislation and guidance in this area since the original legislation was passed. At the time, some of us were against that legislation, but many other people can now be against section 28 as a result of the changes. 
 I am sure that other hon. Members have a more comprehensive list, but the Learning and Skills Act 2000 makes it clear that local authorities have no responsibility for sex education, which makes section 28 completely redundant. It prohibits the national health service from producing material for sex education for adult gay men, and ensures that it cannot be used in schools. Section 148 of that Act ensures that 
 the Secretary of State must provide relevant sex and relationship guidance for schools. The Sexual Offences (Amendment) Act 2001 provides a strong framework of protection for children—not that section 28 was ever about protection for children. Nevertheless, people who are worried about that can now point to that Act. 
 One could name many other pieces of education legislation. Previous Governments, as well as this one, have issued much guidance on the subject, and parents always have the right to withdraw their children from sex education lessons in school. Given that panoply of guidance, this Committee needs to approach the debate differently to the way in which Committees and Parliaments in past decades have approached it.

Andrew Turner: Is the hon. Gentleman asserting that parents have the right to withdraw their children from sex education?

Edward Davey: Yes. Section 5.7 of the sex and relationship guidance, published in July 2001, states:
 ''Parents have the right to withdraw their children from all or part of the sex and relationship education provided at school except for those parts included in the statutory National Curriculum (see section 3).'' 
The parts that section 3 lists are quite a narrow part of sex education. The guidance states that when parents exercise the right to withdraw their children from sex education: 
 ''Schools should make alternative arrangements in such cases. The DfEE will offer schools a standard park of information for parents who withdraw their children from sex and relationship education.'' 
I am happy to give the hon. Gentleman a copy of that guidance if he wants to read it. 
 There are many reasons for removing section 28 from the statute book. I shall not talk about them at length, as I know that many hon. and right hon. Members want to speak about the issue, but I shall mention a few. We should remember that there is a high incidence of homophobic bullying in many of our schools. My noble Friend Lord Tope has done a great deal of research on that in partnership with some of the teaching unions and the Local Government Association. An important corollary to that is an anxiety among many teachers that they cannot support children who are suffering from that bullying. That anxiety may be the result of a misunderstanding of the law, but it is a fact. This House must legislate on the basis of fact. If we are concerned about that homophobic bullying, we should remove section 28 to make it clear that teachers with pupils who are suffering have an unfettered duty to help them.

Andrew Turner: No one would argue with that, but the hon. Gentleman cannot say that a false perception exists and then claim that it is a fact. It is a fact that there is a perception, but the perception is inaccurate.

Edward Davey: The hon. Gentleman is arguing against himself. He agrees that the perception is a fact, which is what I was saying.
 We should be clear about the effect of allowing homophobia and homophobic bullying to remain in the system and of not working sensitively to remove it. 
 I am sure that other hon. Members will have figures to hand, but there is good evidence that the number of suicides among young males correlates to their sense of guilt and bullying as a result of their sexuality. The incidence of suicide in that group is higher than in any other section of the population. 
 We all have friends, colleagues and acquaintances who have suffered because of their sexuality. I heard after I left university that a colleague, a very talented young man, hanged himself in a toilet in the college. His friends believed that he committed suicide because of guilt about his sexuality and because he felt that he could not go back home and confront his parents. That is the reality; that is the sort of discrimination and fear that people have. When we approach the matter, let us forget the tabloid headlines, but remember the reality of many people who suffer because of their sexuality. 
 There are other reasons in favour of the proposal—issues related to sexual health and to the bizarre notion, which I completely reject, that a particular sexuality can be promoted and that people can be converted to it. There is no independent professional support for that view; the British Medical Association, for example, completely rejects it. It is a strong reason for getting rid of section 28, and there are many others. I do not want to labour that point, as I am sure that other hon. Members can do it better than I can. 
 Hon. Members need to be aware of the support for repeal. A huge number of bodies are in favour of our proposal, although I know that others are against. However, there is an impressive list of people and organisations that want the legislation to come off the statute book.

Paul Goodman: Can the hon. Gentleman explain something to me? I understand that not only are a range of organisations in favour of scrapping section 28, although several are against, but the Government are in favour of doing so and will be sympathetic to the hon. Gentleman's proposal. That being so, why does the hon. Gentleman think that the Government have not tabled an amendment to that effect themselves?

Edward Davey: I asked the Minister that question on Second Reading and I was not terribly happy with his answer. I am surprised that the Government have not tabled their own amendment and I wish that they had done so. However, as I said earlier, I do not intend to make party political points on the issue because it is too important.

Kali Mountford: My understanding of my party's policy and the Government's position is that it is their clear intention to introduce a Bill in its own right. Seeing an opportunity, as my hon. Friends have, of using the Bill to scrap the the measure at an earlier date, I would prefer to congratulate the Government on taking that opportunity, rather than denigrating them for not waiting to do so.

Edward Davey: I would rather congratulate the hon. Lady on her initiative than the Government.

David Lepper: In the light of what my hon. Friend said, does the hon. Gentleman agree with the sentiments that I expressed on Second Reading—that it matters not who introduces the amendment; the important thing is that the iniquitous section 28 is repealed.

Edward Davey: The hon. Gentleman will know from the tenor and substance of my remarks that I agree with him, but I ask hon. Members on both sides of the Committee not to make these points but to move on.

David Curry: I am anxious to come to the Minister's defence, although he may think that he does not need me to do so. I wonder whether the Government discussed whether to include a proposal to repeal section 28 in this Bill. Discussions about what to include in a Bill can be quite acrid; the Minister may have wanted such a proposal, but other members of the Govt, mindful, perhaps of the Daily Mail, may not, and they won the argument. That is pure, idle speculation.

Edward Davey: Nothing that the right hon. Gentleman says is idle because he is held in great respect on both sides of the House. Let us get this issue out of the way. I think that the Government did not deal with it in the Bill because they feared that the other place might hold up the legislation. Obviously, there could have been a separate Bill at the same time, but I think that that is probably the judgment that they reached. That is one reason why it is incumbent on those of us who want the provision to be removed from the statute book to talk about the legislation, as I am trying to. We must send a message to the other place that the democratic House wants it off the statute book, and that that is not a partisan point, but one made by hon. Members on both sides of the House. If we make our remarks as I suggest, we will send a very strong signal to the other place that it should stand aside and allow the democratic will of this House to prevail.
 The long list of organisations that support the repeal includes ChildLine, Barnardo's, Save the Children, the Commission for Racial Equality, the Equal Opportunities Commission, fpa—which was formerly the Family Planning Association—One Parent Families Scotland, the Scottish Council of Jewish Communities, the Church of Scotland committee on education, Amnesty International, the National Children's Bureau, the Royal College of Nursing, the British Medical Association, the Methodist Church and the British Youth Council. A very long list of people who are specialist in this field want section 28 off the statute book. Let no one be in any doubt: there is huge support for new clause 1. 
 Finally, and possibly unwisely, I shall comment on new clause 18, which was tabled by some Conservative Members. I understand their difficulties and concerns, but I caution them about going about dealing with those concerns in this way. They seem to want to allow parents to be balloted on this type of issue. That would be a retrograde step. Local ballots of parents on issues such as this would give licence to outrageous campaigns. People would hijack the issue, and people from outside would stir up hatred.

Andrew Turner: Like in the local government elections in Oldham.

Edward Davey: The hon. Gentleman is right to talk about Oldham. I am sure that the Government Whip could enlighten us about that if he so chose.
 I am simply saying that there are mechanisms to ensure that parents are consulted. Indeed, that is a very important part of the guidance. There are protections through parent governors and local education authority representatives on governing bodies. As we have made clear, there is the fundamental protection that parents can remove their children from lessons. If the Conservative party wants to be seen as tolerant, modernised and facing up to its responsibilities, it should not suggest this type of approach. I hope that the Conservatives will withdraw their proposal.

Mark Todd: Is it not also intellectually inconsistent, when considering a matter of individual sexuality, to suggest that a majority vote in a school should determine what approach should be adopted? Our concern should be for the freedom and protection of the individual, not for a democratic process in this matter.

Edward Davey: The hon. Gentleman makes a strong point. In a liberal democracy, the need to protect minorities properly sometimes means that protection cannot be achieved through the ballot box and that some things are not appropriate for a vote. We need the protection of such rights in the framework of law and, sometimes, in the framework of the constitution.
 In making those remarks on new clause 18, I am not trying to goad certain hon. Members in the slightest. I understand that they have had many problems and that many of them have come an awful long way on this issue. We should celebrate that across parties, because above all we need consensus to take the issue forward and get rid of such discrimination.

Derek Conway: Before I call other Members, I remind the Committee that we are also discussing new clauses 18 and 10 and the Government amendments as set out on the amendment paper. The amendments will be taken formally this afternoon, but we have to dispose of the new clauses by 11.25 am, which I am sure that hon. Members will bear in mind in their contributions.

Geoffrey Clifton-Brown: I was interested to see that the hon. Member for Kingston and Surbiton started in a reasonable manner by saying that the debate would be non-partisan and non-political, before spending five minutes attacking our new clause. I can hardly see how that was a non-partisan way of introducing the debate.
 The controversial issue of section 2A has dogged the debate on sex education for some time. The genesis is the Local Government Act 1986, which was then amended by the Local Government Act 1988 to give powers to local authorities. This was then made redundant by the Learning and Skills Act 2000, as the hon. Member for Kingston and Surbiton said, because section 148 of the 2000 Act, which amends the Education Act 1996 section 351, to add subsection 7, says:
 ''Except to the extent provided in subsection (6), nothing in this section shall be taken to impose duties on a local education authority with regard to sex education.'' 
In other words, section 2A has been made redundant anyway, so it would be nonsense if we voted for new clause 1. It would make the law an ass if we tried to preserve something in law that could not be enforced. 
 The Education Act 1996, as amended by the Learning and Skills Act 2000, also imposed duties, including a duty to produce guidance and to maintain a statement and materials in schools. I have examined the guidance, and I urge anyone who has not read it to do so. It is 33 pages long and was issued in July 2000 as document DfEE 0116/2000. It is written extremely well and sets out the subject in great detail in a reasonable and balanced way. At the risk of taking a large document and quoting selectively from it, the Committee will benefit if I read out some brief quotations. It will give Members who have not read the guidance a good idea of what is being used in schools at the moment. 
 It is introduced by three points and starts by saying: 
 ''Sex and relationship education should be firmly rooted in the framework for PSHE'', 
which is personal, social and health education. It continues: 
 ''Effective sex and relationship education is essential if young people are to make responsible and well informed decisions about their lives . . . The objective of sex and relationship education is to help and support young people through their physical, emotional and moral development . . . The new PHSE framework will help pupils develop the skills and understanding they need to live confident, healthy and independent lives. It will play an important role, alongside other aspects of the curriculum and school life, in helping pupils deal with difficult moral and social questions . . . 
 This is the first time that schools have had a national framework to support work in this area. As part of sex and relationship education, pupils should be taught about the nature and importance of marriage for family life and bringing up children. But the Government recognises . . . that there are strong and mutually supportive relationships outside marriage. Therefore pupils should learn the significance of marriage and stable relationships as key building blocks of community and society . . . 
 Effective sex and relationship education does not encourage early sexual experimentation. It should teach young people to understand human sexuality and to respect themselves and others. It enables young people to mature, to build up their confidence and self-esteem and understand the reasons for delaying sexual activity.'' 
We can begin to see how reasonably this document is written. 
 On page 9 the document says: 
 ''The materials used in schools must be in accordance with the PHSE framework and the law. Inappropriate images should not be used nor should explicit material not directly related to an explanation. Schools should ensure that pupils are protected from teaching materials that are inappropriate, having regard to the age and cultural background of the pupils concerned.'' 
I hope that hon. Members will take that paragraph into account when I develop my argument in a minute or two. The guidance states on page 10: 
 ''The Department recommends that all primary schools should have a sex and relationship education programme tailored to the age and the physical and emotional maturity of the children.'' 
My final quotation from the guidance document is on page 16: 
 ''In England in 1998 there were over 100,000 conceptions to teenagers, of which over 8,000 were to girls under 16.''
Of those teenage pregnancies, 38 per cent.—almost 39,000—ended in abortion. We must get this sensitive subject right. 
 The guidance is balanced and written fairly, but some of the material circulating at the moment, particularly in Scotland where the law is different, is frankly more pornographic than educational. It is almost obscene. I have with me a booklet produced by ''Face West''—the gay man's HIV prevention project, providing welfare rights advice and support for people living with HIV—which includes detailed pictures of homosexual practices, including rimming and skat. I do not even know what such practices mean. This little booklet is funded by public money and is circulating among teenagers as young as 12, which is quite unacceptable and inappropriate. 
 I have with me another booklet, which was produced by the Scottish Executive—in other words, with 100 per cent. funding by the Scottish taxpayer. Different sections apply to different ages. The section aimed at seven to 11-year-olds gives a detailed explanation of anal intercourse, masturbation, the clitoris, oral sex and bisexual sex. That is quite unacceptable for seven to 11-year-olds. 
 Still another document produced by the Avon health authority is aimed at nine, 10 and 11-year-olds. Under the title, 
''Challenging heterosexism and developing discussion on issues of sexuality in the classroom'', 
its opening sentence states: 
 ''Homophobia interferes with the healthy development of all Young People''. 
Again, it is unacceptable. We want to ensure a balanced debate and that schools adhere to the guidance. That is why my new clause 18 strengthens the need to use the guidance and to change it.

Andrew Turner: Does my hon. Friend accept that the excellent guidance to which he has referred deals only with schools? No such guidance is provided for youth clubs. The repeal of the section would permit the distribution of all these documents in youth clubs.

Geoffrey Clifton-Brown: My hon. Friend is right. The little booklet that I quoted was designed for and was circulating in youth clubs. With the repeal of section 2A, the guidance should cover all Government organisations; any organisation funded by Government money should have to adhere to the guidance. We are looking for materials that are appropriate to children of a particular age. What is appropriate for children of 14 to 16 is inappropriate for seven to nine-year-olds. A huge difference applies.

David Lepper: Could the hon. Gentleman clarify whether the words that he quoted from the Avon education authority document were intended to be read by children of the age that he mentioned, or were they part of the guidance for teachers in approaching discussion of those issues?

Geoffrey Clifton-Brown: I have no idea whether the teachers were using the document or letting the children read it. I suspect that the teachers probably did, and that the children found it inappropriate. I do not want to get into a facile debate. What is clearly wrong about the document is that it is written in a way that is unsuitable for nine to 11 year-olds.

Desmond Swayne: The document comes with a video that is intended to be, and is shown to children in schools. The clear message of that video is that a young boy in any doubt as to his sexual feelings and proclivities should experiment with all the different kinds available so that he can make up his mind. That is the sort of filth being peddled in schools.
Kali Mountford rose—

Geoffrey Clifton-Brown: I give way to the hon. Member for Colne Valley.

Kali Mountford: Does the hon. Gentleman accept that each governing body has its own curriculum committee containing members of the governing body, including parents, who have to discuss and agree the content of the curriculum for their own school? I can only assume that parents in Avon made that choice. Does he also accept that the other material that he has demonstrated to the Committee is not being distributed in schools and would not be covered by section 28 in England and Wales?

Geoffrey Clifton-Brown: I am grateful for the first part of the hon. Lady's intervention, which brings me nicely to our new clause. I do not want to get into an argument about which materials are available in schools. All that I am saying is that these materials have been prepared with public money for education in schools. I am surprised that anyone in the Committee is having an argument about this. These materials are inappropriate for the ages they are intended for. Therefore, I think that the guidance is reasonable and that is why I want to turn to my new clause 18.
 Before I do so, I refer to section 405 of the Education Act 1996, which enshrines a provision for exemption from sex education: 
 ''If the parent of any pupil in attendance at a maintained school requests that he may be wholly or partly excused from receiving sex education''. 
The hon. Member for Kingston and Surbiton made that point. The Secretary of State has to provide a plan for such children. That provision is unsatisfactory for two reasons: first, the children become stigmatised among their peers; secondly, and more important, well-trained teachers should be able to teach sex education as part of a balanced package in addition to any parental guidance that pupils may receive, otherwise what is the point in having sex education at all? 
 We have come to the current legal position in which local authorities have no locus; the governors of maintained schools have a locus. The guidelines in operation are perfectly adequate, provided that they are enforced across the piece, as my hon. Friend the Member for Isle of Wight said. That applies not just to materials in schools but to all materials that might be 
 used for teenagers of an inappropriate age. If section 2A is to be repealed, there needs to be something else in its place to strengthen the existing situation. 
 The guidance, which is excellent, needs to be strengthened and maintained. It should be incorporated into legislation and it should not be changed until a statutory instrument is approved by Parliament, so that it is still acceptable to Parliament; that would be the new guidance used in schools.

Paul Goodman: I want to probe my hon. Friend. I have a quote from a spokesman for the Scottish Executive on guidelines with reference to the incident that my hon. Friend mentioned. It reads:
 ''These guidelines are there for teachers but it doesn't mean that they are going to be used.'' 
Does that not reinforce my hon. Friend's point that the guidelines need additional force?

Geoffrey Clifton-Brown: As my hon. Friend says, the guidelines need additional force, and the second part of our new clause is also needed. As the hon. Member for Colne Valley said, there must be a proper curriculum procedure, the materials must be available in every school and there should be a written statement, which accords with this reasonable guidance. All that is enshrined in legislation, but we also need a mechanism whereby parents in a particular school can object if they believe that the written statement or the materials go outside, or do not conform with, that guidance. I am not rigid about the form that that should take, but we propose that there should be a ballot to decide whether the material should be rewritten and reintroduced if 25 per cent. of parents in a school object to it.
 The regulations for the ballots would be issued in the form of guidelines from the Secretary of State. At least half those parents would have to vote for withdrawing the written material before any withdrawal. If it were withdrawn, the governors and head teacher would rewrite and resubmit it. If necessary, there should be another mechanism whereby another 25 per cent. would trigger another ballot, after which the material would be sent to the Secretary of State for adjudication as to whether it complied with the guidelines. If it did not, he would substitute national materials and statements as a default.

Edward Davey: The hon. Gentleman rightly said that this is a sensitive matter. Does he now want ballots to be held throughout the country in different schools to deal with it?

Geoffrey Clifton-Brown: I do not believe that that would happen often, because the ballot mechanism would deter any head teacher or governing body from straying too far from the guidance. The last thing a school wants is a ballot. It is a failsafe mechanism. If enough parents are aggrieved by the school's policy, there should be a mechanism through which they can ensure that the material is withdrawn and rewritten. The 25 per cent. trigger may be enough to cause the material to be withdrawn and rewritten.
 One could consider the matter in various ways, but there must be a double-lock safety mechanism, which our new clause would provide. We must ensure that the guidance is available and strengthened so that it cannot be changed, except by Parliament's consent, and that there is an adequate mechanism to consult parents, if necessary by ballot.

Patrick Hall: Does the hon. Gentleman agree that his new clause would lead to numerous ballots in schools resulting in a withdrawal of section 2A in some places but no withdrawal in others, which would be confusing and unsatisfactory?

Geoffrey Clifton-Brown: I made clear how the mechanism works. The parents can call for a ballot if 25 per cent. of them are dissatisfied with the material. The material produced by the governors and the head teacher must be withdrawn and rewritten if the majority vote against it. There may then be a provision for another ballot, or there may not. The matter needs to be considered. If the parents were still dissatisfied, the material would be sent to the Secretary of State for adjudication, and he would substitute national materials and a national statement as a default. There can be no stronger or fairer safeguards, and a ballot would deter any head teacher or governor from straying too far from the national guidelines, which are perfectly reasonable.
 The materials should be educational, not pornographic, but if the Minister wants consensus, or even unanimity, on new clause 1, he must reassure the Committee that either our new clause 18 or something similar will be passed, so that people who are aggrieved by the nature and type of materials circulating in schools feel that adequate safeguards are in place. 
 If the Minister can give that reassurance or, even better, accept our new clause, and if we can achieve unanimity in the Committee on voting to abolish section 2A, that will send a huge message to the House on Report, and to the other place. I say in the strongest possible terms to hon. Members that section 2A is redundant in law—it gives local authorities powers that they do not have under the Learning and Skills Act 2000. Therefore, the law as it stands is an ass. If we do not vote today to get rid of section 2A, we will emerge from the Committee with discredit.

Kali Mountford: I am grateful for the sensible remarks made by the hon. Member for Cotswold. Also, I thank the hon. Member for Kingston and Surbiton, who set the reasonable tone for the debate. Members across all parties have wanted the repeal of section 28, as it has come to be known, for many years, and I agree with him that rehearsing the whole argument, which started in 1998, and casting blame here, there and everywhere would do us no good at all.
 However, I note that two parties here today—the Liberal Democrats and Labour—opposed section 28 from the beginning. My mother would say that, if something is part of a person and natural to them, they can take no credit for acting on it, because that is what they would do anyway. The people who deserve credit are those for whom change is an effort. We should therefore give particular credit to, for example, the 
 hon. Member for Buckingham (Mr. Bercow) and the right hon. Member for Skipton and Ripon, who have changed their view within their party. That is honourable and laudable. The right hon. Gentleman shakes his head, but no doubt he will clarify his position later. People who move with the times and recognise that things are different, rather than those who knew their position from the beginning, deserve credit. 
 The hon. Member for Cotswold made a clear case that this is a redundant section of the Local Government Act 1986, as did the hon. Member for Kingston and Surbiton. However, we should not believe that it has had no effect because it has never been acted on since its introduction and has never been used as a recourse in law. We need to consider that effect. 
 I have received many letters and e-mails since before Christmas, when I started to discuss a repeal of the section. People have written to me about their experiences of it. A local councillor said that, as LEAs do not have direct control over sex education in schools, it seems unlikely that the section could have an effect. However, in one school in that area, a young man, who had produced an extraordinary amount of artwork, died. The school wanted to put on an exhibition of his work, but was prevented from doing so because the young man was gay. It was felt that congratulating him posthumously would somehow promote his sexuality.

Andrew Turner: That is bonkers.

Kali Mountford: The hon. Gentleman says that that is bonkers, and I agree. Nevertheless, it happened.

David Borrow: My hon. Friend says that section 2A is redundant. To a certain extent, that is the case for the LEA role, but does she acknowledge that it still has power in relation to other local government services? It is occasionally used by local authorities as an excuse to block grants to organisations that assist or provide services specifically for the gay community.

Kali Mountford: My hon. Friend is clearly right, although I am happy to say that that has not yet been the case in local authorities that I have had direct contact with. Interpretation of the Act obviously varies across the country, as some people feel that it is possible to give grants and others do not. That mixed feeling and confusion about the section has caused so much trouble, not just in schools, but outside.
 A local community group wanted to see a play called ''The Laramie Project'', which emerged after the tragic death of a 21-year-old in Wyoming. He was beaten to death because of his sexuality, which outraged the whole community. It is about not just the young man who died, but everyone's feeling of horror that people can behave in such a discriminatory way to the point that someone was mutilated and died five days later. 
 The play is not about sexuality; it is about crimes of hate, yet the people who wanted to produce it were told that they could not as it contravened section 28. 
 In the United States, however, the play has received popular acclaim and is viewed not just as a fantastic work of art in its own right, but as a useful mechanism for introducing discussions with young people about their feelings, their sexuality and their fears about other people's sexuality when it is not understood. The play offers a means to discover different ways of settling differences, rather than resorting to violence.

Andrew Turner: Like the hon. Member for Kingston and Surbiton, the hon. Lady has described effectively the misunderstanding about the purpose of section 2A. Surely that is an argument for making clearer what the law means. A local authority does not need an excuse not to give a grant to a gay organisation as it has the discretion to do so or not to do so. My local authority, which, as hon. Members will know by now, does not have a majority of Conservative members, voted overwhelmingly against the repeal of section 2A. Misinterpretation of the law is not a reason to change it, but a reason to get it properly understood.

Kali Mountford: In this case, I feel that the law has no purpose at all. The fact that local authorities can decide what grants to give without having to resort to an excuse shows that the law is redundant. Some local authorities make a decision in one direction and other authorities make a decision in the opposite direction under the same legislation, so it clearly has no purpose. Abolishing that legislation would not change what decisions local authorities could make. It would simply change the reasoning that they might give for a decision.

Geoffrey Clifton-Brown: Does the hon. Lady agree that the discussion on the scope of section 2A and the difference of interpretation as to what it extends to emphasises even more the need for our new clause? In abolishing section 2A, we will need stronger guidance extending to all public sector bodies that receive any public money so that the material produced for children has to be appropriate to their age?

Kali Mountford: The hon. Gentleman needs to have more faith in the electorate and whom they elect. He has demonstrated well how the guidance currently works in schools in England and Wales, and the guidance is very good. Local authorities, outwith schools, also have a responsibility to behave appropriately, but that appropriateness of behaviour is different from the responsibility inside a school, where people might want to go for counselling for particular worries.
 In a counselling session, people need to have the freedom to give the advice that is properly sought in its whole context. That might include using terms and images that I personally would prefer not to see, but I do not seek guidance and am therefore not the person for whom the material is written. It must be written in 
 such a way that the professional person who is giving counselling and guidance knows that it is best for the individual to whom they are giving guidance. 
 I am concerned because I do not think that Parliament is the right body to decide the precise terms in which a counselling session can be run and the images that can be used in it to help a person who is worried to gain proper understanding. The right people to decide that are those who are trained in counselling and in giving medical and educational advice. People should be able to mature appropriately and without fear. They should not have to contend with the overarching and overbearing interference of Parliament. 
 Certain people seem not to trust our local councillors to appoint appropriate people, whether family guidance or youth guidance officers. However, each local authority employs various types of officer and makes it own decisions about that. They also make their own decisions about their spending, and the electorate can call them to account on that. 
 The hon. Gentleman has expressed concerns about how guidance could be used and how people could have a democratic input to that. He referred in particular to schools. I believe that democratic accountability already exists in various forms. There is no need for an extra bureaucratic layer, and heaven knows what it would cost to run lots of ballots or to impose another overarching mechanism on local authorities. Let us consider how people do their work now. The hon. Gentleman said that section 28 was redundant and had no bearing on these decisions, but if that is so, why do we question it? Things seem to be running perfectly well without all the extra strictures that are proposed.

Geoffrey Clifton-Brown: The hon. Lady is perhaps not doing her cause any good. We all want to move forward together on this sensitive subject and to take as much of the country with us as possible, with consensus. The problem is that, if the sort of material that I have talked about continues to circulate, there will be more division in schools, more unhappiness about sex education and more parents unilaterally withdrawing their children from schools. The whole system of sex education will become less effective. Surely it is in all our interests to move forward on this issue with consensus, and if we are to move forward, we must ensure that those materials do not reach children of an inappropriate age.

Kali Mountford: I agree that inappropriate material should not be used with very young children, and that I would not particularly want certain images to be seen in schools, but the hon. Gentleman did not demonstrate that the material that he has talked about is used in schools. It is used in other establishments for older teenagers. There was nothing to say that the material is used in schools. I understand that the documents are available in Scotland, but not particularly in England and Wales. Others have a completely different structure, but that is a matter for them to decide on. I do not intend to dictate to anyone
 how they should live their life. However, it is incumbent on us to give children the guidance and advice that they desperately need.

Paul Goodman: Will the hon. Lady clear up one important point? In common with the hon. Member for Kingston and Surbiton, she is arguing that on the one hand section 28 is completely redundant, as it has been superseded by legislation, but on the other hand that it still has an effect because of the incident that she quoted as an example of the gay artist and the painting. Will she clear up that point?

Kali Mountford: The hon. Gentleman has understood my case well. In law, section 28 is redundant; in practice, it sometimes has an effect. As the leader of the Conservative party said in an interview with Giles Brandreth—I hope that I have not mispronounced his name, given that he is so famous—section 28 sent out the message to gay people that we dislike them.

David Borrow: One point that I wanted to make is that section 28, whatever its practical consequences, has caused tremendous resentment and enmity in the gay community. The feeling in the gay community is out of proportion to the practical effect. For no other reason, the removal of the section will make a great difference to how gay men and lesbians believe themselves to be considered in this country. Will she comment on that?

Kali Mountford: I will comment on that, because we need to be an inclusive society, and an inclusive society means acceptance of everyone. I say acceptance rather than tolerance, as people should not be merely tolerated. If we cannot embrace and love everyone—I do not suggest that we can—the least that we can do is accept each other as human beings on an equal footing without any discrimination or distinction of each other in law or practice. That is why section 28 is truly redundant. It has had its day. The hon. Member for Cotswold continues to feel the need to uphold some parts of it to provide extra layers of protection and perhaps assurance to people that they have nothing to fear, but people have nothing to fear already.

Geoffrey Clifton-Brown: I am not sure that the hon. Lady is living in the real world. There is a huge perception of fear, and unless we dispel it in some way, we will not move forward on the matter with consensus. She must recognise that parental fear if she wants to vote for the abolition of section 2A.

Kali Mountford: We have a problem with competing perceptions, and that presents us with a great difficulty. There is one perception that section 28 is causing a problem and another that without it there would be chaos and madness in schools and that children would not be protected. I suggest that we get rid of all such perceptions but not by introducing extra layers of bureaucracy, particularly those with ballots, which would make it difficult to achieve a good result. A remarkable consensus exists among politicians and among communities. People's perceptions and fears dissipate once they see that in practice their children are being properly educated and supported.
 People have no need to fear. As I have said, every school has a curriculum committee and every committee has a parent. In any event, there will always be parents' days. In my area, if parents are not happy with any aspect of what is happening in a school, they will pack out the school hall to make sure that their views are known. Any head teacher, governing body or head of governors who does not take cognisance of the parents will soon find that their roles crumble away. Parents will simply take their children out of the school, which is their right if they are not happy with how the head teacher is running it. 
 Consulting parents by ballot is unnecessary. It will make it look as though there is still something to be fearful of when there is not. The hon. Gentleman should support new clause 1, because that is the clearest way of making sure that these misinterpretations and perceptions are gone for ever.

David Curry: I was born in the 1940s. I was a child in the 1960s. I tried hard to embrace some of the more strenuous enthusiasms of the 1980s and 1990s, but I fear I have relapsed into a weary tolerance, which may be a fairly sensible posture to bring to politics. [Interruption.] In politics it is difficult always to be tolerant enthusiastically, so perhaps a weary tolerance is the best to which one can aspire.
 There are three reasons why we need to get rid of this provision. First, at best it is inoperable; at worst it is very confusing. It is inoperable in the sense that it sits on the statute book but is incapable of being applied. It is confusing with regard to the people to whom it is addressed, which is no longer relevant to the way most practical management takes place, and therefore it is the statutory equivalent of the tonsil or the appendix to the human frame. It serves no discernible purpose except to cause irritation and discomfort from time to time, and the sensible action would be to remove it. 
 Secondly, it is offensive. We have to draw a distinction between what a piece of legislation or literature says and the impression conveyed by the manner in which it is articulated. Pieces of legislation or literature that are relatively inoffensive can none the less assume significance and be used in an offensive way. The problem with this provision is that the set of attitudes behind it are becoming increasingly out of date. I make no criticism of its authors, but if one looks at the society we live in today one comes back to my noble friend Lord Hurd's stricture at a Conservative party conference, where undoubtedly he was having a difficult time on a difficult subject, which is that we have to live not in the world we wish to live in but in the world that exists not as we wish it to be. That is another example of a certain world-weariness, but it is a reality. 
 We see a world changing rapidly around us. My children are all around the age of 30. I will have achieved the distinction—if it is one—of marrying off three children within 364 days, which is what the Chancellor of the Exchequer refers to as an asymmetric event. They live in a wholly different world from that in which I was brought up, just as my parents lived in a world wholly different from that in which my 
 wife and I live. I notice things that they do not; they take for granted things that I do not take for granted. The environment in which we live is different, and we must accept that it is a good thing that we live in a more diverse world that is more tolerant in many respects, although ugly intolerances still emerge. 
 The third reason is a purely party political one. I am not often accused of making party political points, but this is a liability which my party needs to liquidate. It has been with us for too long and it is a nuisance; we have talked about it for too long and we must get it out of the way and move on to different things. 
 I appreciate the concerns of my hon. Friend the Member for Cotswold to ensure that what is taught in school is appropriate. I speak from experience as a Minister when I say that there are two words that government should never seek to define: one is ''appropriate'' and the other ''reasonable''. The system of government depends upon those two adjectives, neither of which is capable of being defined. Without them, the entire system would collapse. We are all assumed to know what we mean by ''appropriate'' and, funnily enough, in general terms, we do. 
 The Conservative amendment is a noble attempt to get us off the hook. It expresses genuine anxiety. There are difficulties in schools, especially in some urban areas where there are large ethnic minority groups, which bring a different, and sometimes conflicting, baggage to these matters. I hope that the Minister will say something to bring us together to abolish a measure that does none of us any credit. It is time that we moved beyond it.

Nick Raynsford: The Committee has had its ups and downs, but this debate has unquestionably been one of the ups. There has been a serious and entirely proper consideration of sensitive and difficult issues and an absence of bigotry and stereotyping that, sadly, too often characterises debates on this subject. Much is owed to the hon. Member for Kingston and Surbiton for the way he moved new clause 1; to the hon. Member for Cotswold for his pragmatic recognition that section 28 has no further useful purpose; to my hon. Friend the Member for Colne Valley—she raised the issue on Second Reading and is associated with the proposal, which I hope that the Committee will accept—for movingly describing the adverse consequences of the legislation on the lives of vulnerable people; and to the right hon. Member for Skipton and Ripon for his sound and thoughtful advocacy of repeal, which was laced with references to weary tolerance. I thought that I detected in the hon. Gentleman's comments an oblique reference to Cromwell at the end of the Rump Parliament, ''You have sat here too long . . . In the name of God, go.'' The right hon. Gentleman was referring not to a Member of the House—least of all himself—but to section 28.
 The effect of new clause 1 and amendments Nos. 8 to 10 will be to repeal section 2A of the Local Government Act 1986. The section was inserted in the 
 1986 Act by section 28 of the Local Government Act 1988 and so became known as section 28, and I will continue to use that familiar shorthand. 
 Section 28 is an unnecessary piece of legislation; as I shall explain, contrary to popular belief it has no application to schools and therefore has no effect on what is taught in the classroom, as was widely recognised in Committee during the debate. What is taught in the classroom is governed by the Education Act 1996—

Paul Goodman: Will the Minister give way?

Nick Raynsford: Not for a moment. Repealing section 28 would not change that situation. However, section 28 is deeply offensive to many people, as it stigmatises certain lifestyles. The Government are committed to tackling actual and perceived discrimination on the ground of sexual orientation, so I support the amendments to repeal section 28.
 Amendments Nos. 135 and 137 to 142 are tabled in my name; they are all consequential and have the effect of repealing provisions in other statutes which refer to section 28. These provisions would be obsolete if section 28 ceased to have effect. Amendments Nos. 137, 138 and 141 relate to references to section 28 in the Education Act 1996 and the School Standards and Framework Act 1998. The reference in the Education Act 1996 provided that a pupil referral unit is a maintained school for the purposes of section 2A of the Local Government Act 1986. If section 28 ceases to have effect, the provision becomes obsolete. 
 The reference in the School Standards and Framework Act 1998 substitutes certain words in section 2A of the Local Government Act 1986. The original wording— 
''county school, voluntary school, nursery school and special school''— 
was replaced with the generic wording, 
''a maintained school or maintained nursery school within the meaning of the School Standards and Framework Act 1998''. 
Again, if section 28 ceases to have effect, the provision is obsolete. Indeed, as local authorities have no role in setting sex education policy, the provisions currently have no practical effect. 
 Amendment No. 141 will provide that both repeals will take effect two months after Royal Assent, which is the normal period for the implementation of anything other than extremely urgent legislation. Amendments Nos. 135 and 140 relate to the reference to section 2A of the Local Government Act 1986 in the Local Government Act 1988—in other words, the original section 28. Clearly, all references to section 28 of the 1988 Act would become obsolete on its repeal. The effect of amendment No. 140 is again to provide that the repeal will take effect two months after Royal Assent. 
 Amendments Nos. 139 and 142 relate to the reference to section 28 in section 104 of the Local 
 Government Act 2000. Section 104 inserted into section 2A of the Local Government Act 1986 the clarification that nothing in the general prohibition should be taken 
''to prevent the head teacher or governing body of a maintained school, or a teacher employed by a maintained school, from taking steps to prevent any form of bullying''. 
Again, if section 28 ceases to have effect, that provision will become obsolete, although it would continue to be right for teachers and head teachers to take action to tackle and prevent any form of homophobic bullying to help safeguard vulnerable young people, as the hon. Member for Kingston and Surbiton rightly highlighted. Again, amendment No. 142 will provide that the repeal of the provision will take two months after Royal Assent. 
 I do not believe that new clause 18 is either necessary or beneficial, but as the issues are sensitive and prone to misrepresentation, so it is important that I make it clear why the new clause would have no beneficial effect. An example of such misunderstanding underpins the new clause. In linking section 28 to sex education, it fails to recognise that section 28 has no impact on what is taught in schools for sex education. Legislation already makes provision for it to be a matter for government guidance implemented by governors, parents and teachers, as the hon. Member for Cotswold recognised in his frequent and supportive references to the guidance. The repeal of section 28 would not change the position. 
 The intention behind new clause 18 is already sufficiently provided for in the Education Act 1996, as amended by the Learning and Skills Act 2000. That places the responsibility for sex education in schools firmly on teachers and governors and a statutory duty on the Secretary of State to issue guidance. The guidance has been in place for nearly three years. It is explicit that parents should be involved in devising the school's policy and, as I will explain, the low rate of children being withheld from sex and relationship lessons indicates the widespread success of the approach. 
 The Government issued guidance in July 2000. As required by the Education Act 1996, the guidance is designed to secure that all pupils in maintained schools learn the nature of marriage and its importance for family life and the bringing up of children. The guidance—

Desmond Swayne: On a point of order, Mr. Conway. Yesterday, 20 clauses and three schedules were a casualty of the timetable motion. Today, I hope that the record will show that no Member opposed to the repeal of section 28 was able to catch your eye during the proceedings, entirely as a consequence of the right hon. Gentleman's timetable motion. I hope that that will be taken note of in another place.

Derek Conway: I hear the hon. Gentleman's point of order. What hon. Members intend to say is not a matter for the Chairman. The Chairman is concerned only with their conduct when they are saying it.

Nick Raynsford: The guidance makes it clear that it is not the role of teachers to promote any particular sexual orientation. It emphasises the importance that should be attached to the value of the family, marriage, good parenting and stable relationships. It also tackles issues of prejudice and bullying.
 Section 401(3B) of the Education Act 1996, which was inserted by the Learning and Skills Act 2000, requires governing bodies and head teachers to have regard to the guidance in devising each school's own policy on teaching about sex and relationships. In doing so, they should involve parents to ensure that they have the opportunity to influence the school's policy. Furthermore, the Department of Health issued guidance on health to health bodies in September 2000 to ensure that they had regard to the guidance issued by the Secretary of State when they produced materials for schools. 
 The framework produces policies that have widespread local support. None the less, I entirely understand that a few parents may want to withhold their children from sex education lessons, which they can do from the non-statutory elements; that is, the parts of the national curriculum that science does not cover. That happens with less than 1 per cent. of pupils, which is clear evidence of the success of the current approach. Accordingly, a ballot by parents on the school's policy is an unnecessary requirement. The amendments are not appropriate. We urge them to be withdrawn, and urge that the new clause tabled by the hon. Member for Kingston and Surbiton to be accepted. 
 It being twenty-five minutes past Eleven o'clock, The Chairman proceeded to put forthwith the Question already proposed from the Chair. 
 Question put, That the clause be read a Second time:—
The Committee divided: Ayes 19, Noes 2.

Question accordingly agreed to. 
 Question put, That the clause be added to the Bill.
The Committee divided: Ayes 19, Noes 2.

Question accordingly agreed to. 
 Clause read a Second time, and added to the Bill.

New Clause 18 - Repeal of section 2A ofLocal Government Act 1986

'(1) The Secretary of State may by order made by statutory instrument provide that section 2A of the Local Government Act 1986 (c.10) shall cease to have effect. 
 (2) No order under this section shall be made unless the Secretary of State has certified that— 
 (a) appropriate guidance has been issued under section 403(1A) of the Education Act 1996 (c.56); and 
 (b) an appropriate mechanism has been established for consulting parents of registered pupils by ballot about the contents of any written statement made in pursuance of section 404(1)(a) of that Act. 
 (3) No order shall be made under this section unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.'.—[Mr. Clifton-Brown.] 
 Brought up, and read the First and Second time. 
 Motion made, and Question put, That the clause be added to the Bill.
The Committee divided: Ayes 5, Noes 15.

It being after twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.